Aereo raises $38M to expand to 22 new cities

New areas include Boston, Philadelphia, Dallas, Baltimore, Miami and Chicago

Big news out of Web TV service Aereo on Tuesday, with the company announcing both a big new round of fundraising and wide expansion into nearly two dozen new cities around the country.

Aereo has raised a $38 million Series B round of financing. The round was led by existing investors IAC and Highland Capital Partners, with participation from revious investors FirstMark Capital, First Round Capital, High Line Venture Partners, and select individuals. The company had previously raised a $20.5 million Series A round in February 2012. The new funding brings the total raised to $63 million.

The announcement of the new funding was made by Aereo’s CEO and Founder, Chet Kanojia, at the Citi Global Internet, Media & Telecommunications Conference in Las Vegas Tuesday.

The money will be used to bring Aereo to 22 new cities across America. Over the course of 2013, the service will be coming to Boston,Miami,Austin,Atlanta,Chicago,Dallas,Houston,Washington,DC,Baltimore,Detroit,Denver, Minneapolis, Philadelphia, Pittsburgh,Tampa,Cleveland,KansasCity,Raleigh-Durham,SaltLakeCity,Birmingham,Providence,andMadison. The service was originally launched in New York City in March 2012.

Aereo says that the expansion will make the service to accessible to more than 97 million new consumers.

New York City-based Aereo is a Web platform that allows users to watch live TV on their mobile devices or computers. It grabs over-the-air TV signals and routes them to users over the Internet, so they can watch broadcast TV whenever and wherever they want, on devices including PCs, iPads and Roku boxes.

No cable subscription is required to use Aereo and membership plans begin at $1 per day, $8 per month or $80 per year. Aereo is currently supported on iPad, iPhone, Chrome, Internet Explorer 9, Firefox, Safari, Opera, AppleTV and Roku.

There are currently 28 broadcast channels available over-the-air in New York City, including major networks such as WABC, WNBC, WCBS, WNYW-FOX, WPIX-11, WNET-PBS, and PBS Kids, special interest channels such as NYC.GOV, NYC-LIFE, Ion and Qubo, and foreign language broadcast channels such as Telemundo, Azteca, Telefutura, Univision, Sinovision, NTDTV and CGN-TV.

Consumers in the new areas canrequestinvitationsthroughtheAereowebsite. Aereoalsoplanstoprovideineachmarket with its TryforFree feature,whichallowsconsumerstheabilitytoaccessAereo’stechnologytowatchtelevisionforacontinuousone-hourperiodeachday, freeofcharge.

The future of television?

Aereo might seem like a harmless service, its just watching show on a computer or mobile device instead of a television, but it has been seen as a threat to the future of cable packages and broadcast television as we know it.

In March of 2012, many New York-based broadcast stations participated in lawsuits filed against Aereo, stating that their business violates copyright law by using their broadcasts in an unauthorized Internet delivery service that is receiving, converting and retransmitting broadcast signals to its subscribers for a fee.

In July, A U.S. district judge denied the broadcasters an injunction, instead allowing Aereo to continue operating while the networks pursue the copyright lawsuit against the company. The lawsuit still has not been settled and is the judge's decision is being appealed in the U.S. Appeals Court for the Second Circuit.

Whatever happens, television, and the way people watch it, is changing. A survey from NPD in August found that 18% of people are accessing online video on TVs on a daily basis, with some 25% accessing it several times a week, with movies driving much of that growth.

Either the networks can embrace the new technology, and make money off of it, or they will be left behind.